A terrific comment on repos from this Zero Hedge piece:
Fred lends Bill his car to go to the grocery store. On the way Bill stops off at Pay-Day Loans and borrows $1,000 using Fred's car as collateral. Pay-Day sells the loan to GS who uses the money in Fred's account to buy the loan.
A week later Bill gets killed by a crack dealer, the loan never gets repaid, Fred's car is seized and his account at GS is Corzined. Pay-Day and GS get a .gov bailout, Fred's car is sold at auction, and Fred's account at GS is vaporized as an unintended consequence without malice which makes it OK. Pay-Day and GS make generous donations to political parties. The Fed prints some extra money to cover the costs of the transactions and makes it part of the public debt. The tax payers are screwed, the lenders are made whole and Fred has no wheels, is broke, goes on food stamps and disability.
Or did I miss something?